Did Microsoft Buy Yang's Departure?

By Roy Mark  |  Posted 2008-11-18

Some of my colleagues are making much out of Microsoft's lobbying efforts to kill the proposed Google-Yahoo advertising deal that ultimately led to the resignation of Yahoo CEO Jerry Yang. As the Iconoclast puts it, "In return for millions of dollars distributed to Washington insiders, Microsoft could save billions on an eventual Yahoo purchase."

This, of course, assumes Microsoft spent all of its lobbying dollars directly on scotching the Google-Yahoo ad deal (it didn't) and that Microsoft is still interested in acquiring Yahoo (it might or might not be). It also assumes another of the Iconoclast's favorite themes -- deep, dark conspiracies -- was in play.

Google wasted little time in spreading the conspiracy theory. Google's Washington office rushed the Iconoclast's article to as many media outlets as possible and added the comment that it is "amazing" that Microsoft pumped up its lobbying dollars in 2008.

It is true Microsoft spent almost $2 million ($1.98 million) in the third quarter alone to spread Redmond's message in Washington. Over the same third quarter, Google spent $720,000. Through the third quarter, Microsoft has spent $6.9 million on federal lobbying this year, while Google has spent $2.1 million. Yahoo has so far dropped $1.8 million in 2008 lobbying costs.

But none of this is unusual, and it is certainly not a conspiracy to spend money attempting to influence Washington. In fact, both Microsoft and Google are small players in the big picture. Exxon has already spent $17.8 million on lobbying in 2008. General Electric threw a cool $15 million on 2008 Washington lobbying, closely followed by Verizon at $13.4 million and AT&T at $11.6 million. The U.S. Chamber of Commerce is the 2008 lobbying spending leader with $57.9 million.

What is surprising -- if not amazing -- is that a Department of Justice that approved mergers between Google and DoubleClick, AT&T and SBC, AT&T and BellSouth, Sprint and Nextel, and Verizon and MCI would have problems with an advertising deal between Google and Yahoo.

Indeed, score one for Microsoft, but Google has it own successes in Washington lobbying from forcing open network standards on the Federal Communications Commission's 700MHz auction and leading the fight for white spaces devices. Both Microsoft and Google consider the money well-spent, as does any company that persuades Washington to vote its way.

That's not a conspiracy, just business as usual.

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